Retail giants face stiff penalties for underpaying trolley workers

Updated
August 29, 2014 19:12:00

The Fair Work ombudsman says Australia's big retailers face stiff penalties if they fail to pay the proper wages to trolley collectors. The workplace watchdog says exploitation is rampant within the trolley collection industry and the big retailers can't continue to shirk their legal responsibilities by relying on labour-hire subcontractors.

MARK COLVIN: The Fair Work ombudsman has issued a stern warning to Australia's big retailers that they face stiff penalties over the underpayment of shopping trolley collectors.

Forty per cent of trolley workers don't have education beyond Year 10, half are under 25 and some are disabled.

The workplace watchdog says exploitation is rampant and the big retailers can't continue to shirk their legal responsibilities by relying on labour-hire subcontractors.

Janine Webster, chief counsel for the Fair Work Ombudsman, spoke to Emily Bourke.

JANINE WEBSTER: Recent census data says that there's about 1,500 people engaged in this industry, and yet, over 500 have had to come to our office and its predecessors in order to assist them to recover wages. So this is an area where there's obviously a significant amount of exploitation going on, which perhaps isn't surprising given the types of people attracted to this type of work.

EMILY BOURKE: What are the wages, what are the proper wages and how much have they been underpaid?

JANINE WEBSTER: Look, we have incidences where people are being paid as little as $5 an hour, so we're talking about fairly extreme exploitation and that's why we've taken matters to court in this industry. They should be paid $18 an hour, you know, that's at the lowest level within the relevant award. Obviously, if they're casuals, it'd be a little bit more. But we have certainly seen instances of fairly rampant exploitation in this industry.

EMILY BOURKE: And how much have you been able to recover?

JANINE WEBSTER: We've been able to recover $433,000 in terms of matters before the court. I think we're not going to be able to recover everyone's wages one by one. That's why we're sending this message and saying, look, we actually need the assistance of the big players to come on board, have a look at your procurement practises and assist us in eradicating this issue across the country.

And we're not saying contracting out isn't a legitimate business decision; it often is for a range of reasons. But let's talk about what options or what things you can put in place to make sure that at the end of the day the people pushing the trolleys associated with your brand are being paid the proper minimum wage.

EMILY BOURKE: Why are the companies at the top of the supply chain in any way responsible either morally or legally?

JANINE WEBSTER: We're heading in a direction where the consumer is interested in the ethical considerations when they buy products and services from companies in Australia. You can get apps on your phone these days. You can be standing in the supermarket and bring up all sorts of information about companies and their practises. So, it actually goes even beyond saying a morally or potentially a legal issue. It's a business decision as well to tidy up in these areas.

EMILY BOURKE: Do you see this as the big companies, the big players being unscrupulous or wilfully turning a blind eye?

JANINE WEBSTER: In our experience, it's probably - I'd say it's more turning a blind eye. Probably not appreciating the extent to which, say, the accessorial liability provisions can extend and we're testing that at the moment. We at the Fair Work Ombudsman really prefer to work with big business.

EMILY BOURKE: Well what are the alternative models for sourcing labour?

JANINE WEBSTER: So recently we entered into an agreement with United Trolley Collectors and they service some 700 sites of Coles. They have entered an agreement with us whereby they're going to make sure that those employees are paid the proper wages, even when they subcontract out again.

So, really simple steps. Things like, again, doing the maths when you're procuring, but also setting up those systems to check.